cannabis regulatory approaches · (cannabis expiation notices) 15 us states that have introduced...

www.ccsa.ca • www.cclt.ca

Cannabis Regulatory Approaches May 2016

http://www.ccsa.ca/

Cannabis Regulatory Approaches

Cannabis Regulatory Approaches © Canadian Centre on Substance Abuse, 2015

CCSA, 500–75 Albert Street

Ottawa, ON K1P 5E7

Tel.: 613-235-4048

Email: [email protected]

Production of this document has been made possible through a financial contribution from Health

Canada. The views expressed herein do not necessarily represent the views of Health Canada.

The information provided in this document is up to date as of May 31, 2016

This document can also be downloaded as a PDF at www.ccsa.ca

Ce document est également disponible en français sous le titre :

Cannabis : approches réglementaires

ISBN 978-1-77178-291-3


Canadian Centre on Substance Abuse • Centre canadien de lutte contre les toxicomanies Page 1

Regulatory Continuum Regulatory options for cannabis fall along a continuum, rather than into distinct categories. The diagram illustrates the continuum with

examples of the various approaches and countries that have implemented them.



Summary of Approaches Model1 Component Description Advantages Possible Concerns Jurisdictional

Examples

Cri

min

aliza

tio

n

Alternative

Sanctions

Criminal

prohibition is

maintained,

with diversion

options

introduced

Means of avoiding a record of

criminal conviction

Retains objectives of denunciation

and deterrence

Continued compliance with

international conventions

Opportunity for unequal application due to

police discretion

Can still involve significant police and

justice system resources, depending on

model used

Australia, United

Kingdom, US states

Diversion —

Fine

Police have the

option of

issuing a ticket

with a fine

associated in

place of laying

charges

Reduced resource impact on

enforcement

Does not require significant

legislative change (e.g., could be

done through Contraventions Act)

Canadian Association of Chiefs of

Police have spoken in favour of this

option

Potential for net-widening (increased

enforcement) due to streamlined process

Although not a criminal record per se,

record of diversion for a drug offense can

still impede international travel

Potential for fines to differentially impact

marginalized or low socio-economic status

populations

South Australia

(Cannabis Expiation

Notices)

15 US states that

have introduced

varying fine options

(e.g., Maine, NY,

Rhode Island)

Diversion —

Treatment

Police have the

option to refer

individuals to

treatment in

place of laying

charges

Mechanism and incentive for access

to treatment for those who would

benefit

Most people who use cannabis do not

require treatment

Limited capacity in the treatment system

to handle additional demand

Legislative change required2

Treatment services are a provincial and

territorial (P/T) responsibility, so P/Ts

would bear the brunt of the resource

impact within a context of significant

health budget concerns and dissatis-

faction with federal transfer payments

Portugal

1 Note that the models and components fall across the continuum presented on page one and should not be interpreted as distinct categories.

2 The requirement for legislative change is noted as a concern in light of the time and resources required, not as an assessment of whether such change is the most appropriate means through

which to achieve policy goals.



Model1 Component Description Advantages Possible Concerns Jurisdictional

Examples Escalating

warnings

Sanctions

associated with

possession

escalate with

the number of

police

encounters,

usually

beginning with

a warning

Opportunity to identify problematic

use through repeat encounters and

respond as appropriate (e.g., in

conjunction with diversion options

such as treatment)

Administrative burden of tracking number

of encounters

Potential complications with tracking

encounters across jurisdictional

boundaries without creating more formal

records that would then be accessible to a

broader range of partners (e.g.,

international border control)

Legislative change required

International evidence is not clear about

the success of this approach in achieving

social control

Different enforcement jurisdictions in

Canada might complicate accurate

tracking of encounters (e.g., municipal,

provincial, national, First Nations)

United Kingdom D

ecri

min

aliza

tio

n

Decriminal-

ization —

General

Non-criminal

penalties

replace

criminal

penalties for

selected

offenses such

as possession

Removes the potential for a record of

criminal charges for individuals in

possession of small amounts

(quantity to be determined)

Reduced enforcement resources

required to issue a fine versus lay a

criminal charge, therefore potential

cost savings at the provincial,

territorial and municipal levels

Potential for use as an interim

measure while a comprehensive

legalization framework is being

developed

When targeted to personal possession,

does not address issue of illicit supply, so

the black market remains

Potential for fines to differentially impact

marginalized or low socio-economic status

populations

Requires revision to legislation

Some debate about compliance with


Australia, Portugal,

Netherlands, Spain

Civil fine The criminal

charges

associated with

personal

possession are

Retains denunciation component

Police in Canada have expressed

support for the tool of laying criminal

charges in cases of possession,

particularly where other criminal

activity is involved

Removes a strategic tool available for use

by police

Risk of net-widening (increased police

contacts) due to relative ease of issuing

fines versus laying charges

Vermont (although

still within federal

criminal legislation)




Examples replaced by

civil fines

Regulated

sites (i.e.,

cafes)

Use of

cannabis is

permitted in

designated

locations that

are subject to

regulations

Can set regulations to prohibit

access for youth, restrict product

forms and THC concentrations,

purchase quantities and so on

Does not address the issue of illegal

supply

Resources are required to develop and

enforce regulations

Netherlands

Collectives or

private

members’

clubs

Production,

distribution

and use are

permitted

among

members and

subject to

regulation (can

also take place

in a legalized

framework, as

in Uruguay)

Can set regulations to prohibit

access for youth, restrict product

forms and THC concentrations,

personal quantity allowances,

membership numbers and so on

Increased opportunity for quality

control and quantity regulation in

comparison to home production

A template for this approach exists

through private members lounges for

tobacco

Resources are required to develop and

enforce regulations

Potential for diversion of private product to

the illicit market

Involvement of organized crime noted in

some European locations

Potential for unequal application of the

law when comparing those with and

without access to a private club

Significant resources required for

monitoring compliance with production,

quality and operating regulations

Potential for profit motives to guide club

operations (e.g., expand membership and

increase production quantities)

Spain, Belgium,

Uruguay

Le

ga

liza

tio

n

Legalization -

General

Criminal

sanctions are

removed and

production,

distribution

and use are

subject to

regulation

Eliminates dual criminal–civil system

for production and distribution

versus use

Creates a broader framework for

regulatory strategies (e.g.,

restrictions on age, purchase

quantity and product format, quality

control, retail location restrictions

and marketing and promotion)

The Centre for Addiction and Mental

Health and the Canadian Public

In contravention of international

conventions

Potential impact on public health and

public safety (e.g., impaired driving,

emergency room admissions)

Uncertain impact on the black market and

organized crime

Requirement for a comprehensive

regulatory framework considering, for

example, limits on forms of sale such as

Uruguay,

Washington state,

Colorado, Alaska,

Oregon, Washington,

DC




Examples Health Association have publicly

expressed support for legalization

edibles, levels of THC, marketing and

promotion, and packaging (e.g., pre-rolled

versus bulk)

Tax revenue needs to be balanced against

cost of administering regulations and

investing in education, prevention and

treatment

Personal

production

Individuals are

allowed to grow

a limited

amount of

product

Potential quality control through

licensing regulations

Individuals are not reliant on industry

production (e.g., strain selection,

growing techniques, cost)

Risk of diversion

Enforcement of quantity and quality

controls is difficult

Washington, DC

(personal production

only)

Colorado, Alaska

(personal production

alongside retail

sales)

State-

licensed

production

State-issued

licenses are

required to

grow and

distribute

product

Note: can be

exclusive or

alongside

personal

production

Greater control over product

availability through licensing

requirements

Can set limits on quantity of

producers and product

Opportunity for quality control,

including THC concentrations

Model in place through licensed

medical producers

Significant resources required to

effectively monitor and enforce regulations

Challenges associated with either

consolidating medical and recreational

production or maintaining two distinct sets

of regulations

Washington,

Colorado

Open market

production

No special

license

required for

production

beyond

standard

health and

safety

Reduced regulatory and enforcement

burden on the state

Competitive commercial market likely to

reduce price and encourage increased use

Reduced ability for quality control might

pose a public health risk

None to date




Examples Limit to

state-

controlled

sales

Distribution

through state-

licensed

outlets only

State control over all aspects of retail

sales

Immediate state access to sales

revenue

Opportunity to expand existing state-

controlled alcohol outlets

Strongest support for containing

rates of use based on lessons

learned from alcohol

Puts the state in a position in which it is

selling a substance in breach of


Uruguay (licensed

pharmacy model)

Private retail

sales

Private

retailers are

licensed by the

state to sell

cannabis

State can generate revenue through

license fees as well as sales tax

State has the ability to set licensing

and operating regulations

Many provinces are introducing

privatized alcohol sales, providing a

possible precedent and model for

private cannabis sales

Less direct access to sales revenue

Conflict between public health interests

and profit motives (e.g., pressure from the

commercial market about advertising and

promotion)

Colorado

Distinct

medical and

recreational

markets

Sales and

potentially

production are

governed by

distinct regula-

tions, pricing,

access and tax

structures, with

medical access

generally

having higher

purchase and

possession

limits, lower

taxes and

access by

minors

Provides a way to maintain lower

pricing for those with recognized

medical conditions

Recognizes the possibility of different

needs (e.g., quantities, strains,

formats) for medical use

Potential for diversion between systems

Maintains a gatekeeper role for physicians

regarding medical access

Potential for abuse of the medical system

to take advantage of lower pricing (e.g.,

doctor shopping)

Resource demand associated with

maintaining two regulatory systems

Regulation and enforcement is more

complex

Colorado




Examples Merged

medical and

recreational

markets

A single access

system is in

place regard-

less of whether

the purpose for

use is

therapeutic or

recreational

More streamlined regulation and

enforcement

Challenge of designing a single regulatory

system that respects court decisions

focused on ensuring ease of access and

public health considerations, while

controlling access within the recreational

context

In Canada, access to cannabis for medical

purposes has been largely determined

through the courts, requiring any

developments in the recreational market

that influence the medical market to be

reviewed in light of compliance with court

decisions

Washington



Legalization Regulation at a Glance The following table provides an overview of the regulatory details developed in Colorado, Washington state, Oregon, Alaska and Uruguay.

Note that this overview does not provide a comprehensive description of all associated fees, regulations and so on, and that regulations

continue to evolve as this report is being published. Readers should consult with the respective jurisdictional regulatory authorities for

additional details and to ensure currency of information.

Colorado Washington State Oregon Alaska Washington, DC Uruguay

Status Retails sales began

January 1, 2014

Retail sales began

July 8, 2014

Limited sales from

existing medical

marijuana

dispensaries began

October 1, 2015

Oregon Liquor

Control Commission

accepting license

applications

Retail sales expected

in mid-2016

Final rules to be

developed and

reported to

legislative bodies by

January 1, 2017

Law in force as of

February 24, 2015

Retail licenses to be

issued in May 2016

In effect as of

February 26, 2015

Cooperatives and

personal production

in place in 2014

State-authorized

producers have

been identified

Call for applications

for pharmacy

licenses closed

May 16, 2016

Initiation of

pharmacy sales

estimated in

summer 2016

Personal

possession

and/or sales

limits

1 oz 1 oz dried

16 oz infused solid

product

72 oz infused liquid

product

1 oz dried

16 oz infused solid

product

72 oz infused liquid

product

5 g extracts or

concentrate

4 immature plants

10 plant seeds

1 oz; can also

possess all product

grown from home

7g concentrate

Products containing

up to 5,600 mg THC

2 oz 40 g/month

purchases from

pharmacies;

maximum

480g/year




Age

restrictions

21 21 21 21 21 18

Personal

production

Up to 6 plants (max.

3 mature)

Must be in

enclosed, locked

space

No Up to 4 plants and

8 oz dry marijuana

16 oz in solid form

72 oz in liquid form

16 oz concentrates

Can transfer these

amounts for non-

commercial

purposes (limit of

1 oz dried product)

Production of

extracts prohibited

Up to 6 plants in a

household residence

(max. 3 mature)

Up to 6 plants in a

primary personal

residents (max. 3

mature)

Up to 6 plants per

household with a

harvest of no more

than 480 g/year

Commercial

production

Yes, state licensed

Mandatory tracking

system

Yes, state licensed

and capped

Mandatory tracking

system

Yes, state licensed

Mandatory tracking

system

Yes, state licensed,

indoor and outdoor

permitted

Mandatory tracking

system for plants

over 8” high

No Yes, state licensed

Retail

distribution

Yes, state licensed Yes, state licensed

and capped

Licenses initially

allocated via lottery

Yes, state licensed

In person sales and

home delivery

Yes

In-person sales only

No

Individuals can

transfer up to 1 oz,

but there can be no

remuneration

State purchases

from commercial

growers and

supplies to licensed

pharmacies

On-site retail

consumption

No No No Yes, if separate

space within shop is

provided

No No




Licensing

body

Colorado

Department of

Revenue

Washington State

Liquor and

Cannabis Control

Board

Oregon Liquor

Control Commission

Alcohol and

Marijuana Control

Office

N/A Instituto de

Regulación y

Control del

Cannabis (IRCCA)

License fees Application fees:

New applicants:

$5,000

Licensed medical

expanding to

retail: $3,000

Testing facility:

$1,000

License fees:

Cultivation facility:

$2,200

Manufacturing:

$2,200

Retail: $3,000

Testing: $2,200

Application: $266;

Annual fee: $1,062

Application: $250

Production:

Micro Tier I:

$1,000

Micro Tier II:

$2,000

Tier I: $3,750

Tier II: $5,750

Processors,

wholesalers,

retailers and

laboratories:

$4,750

Changes to license:

$1,000

Application: $1,000

Retail: $5,000

Limited cultivation:

$1,000

Cultivation: $5,000

Extract-only

manufacturing:

$1,000

Manufacturing:

$5,000

Testing: $1,000

Handler permit: $50

N/A Unknown

License

types

Retail store,

cultivation facility,

product

manufacturer

Producer,

processor, retailer

Production;

processor;

wholesale; retail,

laboratory

4 types: retail,

cultivation (small

grower subcategory

for <500 square

feet of canopy),

manufacturing

(subcategory for

concentrates only),

and testing

N/A State authorized

producer, licensed

pharmacy or

licensed

cooperative




License caps Individual with

controlling interest

in 3 or more

cultivation facilities

must have

controlling interest

in at least 1 retail

store for each

multiple of 3

cultivation licenses

Currently 556 No caps on quantity

of licenses or

number of licenses

that can be held by

an individual

No caps on quantity

of licenses or

number of licenses

that can be held by

an individual or

company

N/A 2 licenses granted

for nation-wide

production

Local options Can prohibit or

impose additional

licensing or approval

requirements for

retail businesses

Caps at regional

levels

Business must

notify local authority

before opening

Can only prohibit

licensed facilities

through voter

referendum

Can prohibit

licensed facilities

Cannot prohibit

personal use or

possession

N/A No

License

restrictions

(size or

structure)

Standard

manufacturing

license permits up

to 1,800 plants

Extended count

licenses available

for 6,000 and

10,200 plants

3 tiers of production

based on canopy

size (2,000, 2,001–

10,000 and

10,001–30,000 sq.

ft)

Indoor (max. sq. ft):

Micro Tier I: 625

Micro Tier II:

1,250

Tier I: 5,000

Tier II: 10,000

Outdoor (max. sq. ft):

Micro Tier I: 2,500

Micro Tier II: 5,000

Tier I: 20,000

Tier II: 40,000

1 company can hold

all types of license

except testing

Testing licensees

can hold only

testing licenses

N/A Co-ops can have up

to 45 members and

produce up to 99

plants

2 state-licensed

producers

contracted for

2,000 kg each/year

Location

restrictions

Cannot be co-

located with

alcohol, tobacco or

food sales

Min. 1,000 ft from

schools and child

care centres

Min. 1,000 ft from

schools, parks,

playgrounds, public

transit centres,

game arcades, etc.

Min. 1,000 ft from

schools

Licenses are

transferable

Cannot be co-

located with liquor

licensee

Min. 500 ft from

school, recreation,

youth, religious or

correctional centres

Cannot be co-

located with liquor

licensed premises

Licenses are non-

transferable

N/A Distributed through

pharmacies only

Co-operatives must

be 150 m from

schools




Taxation 15% excise; 10%

sales + municipal

taxes (approx. 30%

of total price)

Initially, 25% excise

tax at each of

production,

processing and

retail sale + state

and local sales

taxes (approx. 50%

of total price)

Revised in July

2015 to single 37%

excise tax

Retail sales tax of

17% plus up to 3%

local tax

Excise tax of

$50/oz

N/A Marijuana will not

be taxed, but retail

sales strategy is yet

to be finalized

Dedicated

revenues

Targeted to

prevention,

treatment and

administration

Targeted but a

portion re-allocated

to the general fund

Marijuana Control

and Regulation

Fund distinct from

General Fund

No N/A License fees will

fund the IRCCA

Forms of

sale

Dried marijuana,

extracts, infusions,

concentrates

As of October 1,

2016, edibles must

be stamped to

indicate presence of

THC

Colorado Cannabis

Chamber of

Commerce

implementing

voluntary restriction

on edibles formats:

no human or animal

shapes as of

October 1, 2016

Dried marijuana

and infusions

Dried marijuana,

solids, liquids,

concentrates,

extracts, plants,

seeds

Dried marijuana,

edibles,

concentrates

Product cannot be

adulterated food or

drink, or resemble

familiar food or

drink items,

including candy

Serving size must

be clearly marked

N/A Dried marijuana

3 strains to be

produced by state-

licensed growers




Potency and

quantity restrictions

Edibles can be no

stronger than

10 mg per serving;

no more than 10

servings per

package

Edibles can be no

stronger than

10 mg per serving;

no more than 10

servings per

package

Edibles can be no

stronger than 5 mg

per serving; up to

10 servings per

package

Edibles can be no

stronger than 5 mg

per serving; up to

10 servings per

package

N/A Pharmacy sales

limited to 3 strains

produced by state-

licensed growers

THC level capped at

15%

Packaging No more than

100 mg THC per

individually

packaged edible;

servings up to

10 mg must be

clearly marked and

separable

Child-resistant and

not appealing to

children (i.e.

cartoons or similar

characters); cannot

include the word

“candy” as of

October 1, 2016

Usage instructions

for non-edibles;

health warnings;

THC and CBD

content listed

Child resistant and

tamperproof

Edible servings

must be packaged

individually; liquid

product must

include a serving-

size measuring

device

Standard warnings

must be included

on the label

Must indicate THC

and CBD levels,

business or trade

name and inventory

ID number

Child resistant and

not attractive to

minors

Re-sealable if more

than 1 serving

Potency, activation

time, contents and

health warnings

Edible products,

extracts and

concentrates must

list serving size and

number of servings

Standard warnings

must be provided

No cartoon

characters or other

graphics that might

appeal to children

Opaque, re-

sealable, child-

resistant

Identifies store, THC

content

Provides standard

health warnings

N/A No branding




Marketing,

advertising

and

sponsorship

Restrictions on

number and

location of signs

Restriction on

advertising or

sponsorship where

more than 30% of

the audience is

under 21

Cannot target out-

of-state persons

Restrictions on

number and

location of signs

No advertising that

is attractive to

minors, promotes

excessive use,

promotes illegal

activity under state

law, or otherwise

presents a threat to

public health and

safety

Restrictions on

number and

location of signs

N/A Not permitted

Residency

restrictions

¼ oz purchase limit

for non-residents

2-year residency

requirement for

retailers, producers

3-month residency

requirement for

retailers, producers

2-year residency

requirement for

production and sale

until 2020

Owners of

marijuana

companies must

have lived in Alaska

for min. of 1 year

No

However, no

opportunities for

non-residents to

purchase

Only Uruguayan

citizens can legally

purchase or grow

marijuana

Driving

restrictions

Yes

5 nanograms of

THC per ml of blood

Yes

5 nanograms of

THC per ml of blood

Details of restrictions

in development

Consumption while

on the highway is a

Class B violation

Yes

Included in existing

impaired driving

prohibition

Yes

Cannot operate a

vehicle while under

the influence

Yes

Testing and limit to

be set by IRCCA

Public use No No No No No No




Medical

access

Licensed medical

production and

retail system pre-

dates retail licensing

and continues to

operate in parallel

with retail

Medical and retail

merging under one

system, but with

separate regulations

(e.g., age of access,

purchase quantity,

taxation)

Retailers will need

an endorsement to

also conduct

medical marijuana

sales

Oregon Health

Authority

administers Oregon

Medical Marijuana

Act independently

Medical and

recreational

processing and

sales cannot be co-

located; growth can

be co-located with a

special license

Personal production

limits for medical: 6

plants; can grow for

up to 4 cardholders

Medical marijuana

registry permits

personal production

or production by a

designated

caregiver

No state-licensed

medical

dispensaries

Licensed medical

cultivation and

dispensary system

Legal since 2013,

but framework and

access is still in

development.

Other Outlines a process

for the certification

of researchers

Includes good

Samaritan and

medical care

exclusions

Product cannot be

labelled organic

Handler permits

obtained through

completion of an

education course

and written test

Uruguayans must

register for form of

access (personal

production, co-op or

pharmacy sales)



Selected Reports The following list presents recent reports that contain analysis of cannabis policy options and implications from a range of perspectives. The

Canadian Centre on Substance Abuse does not endorse the conclusions or recommendations of these reports, but recognizes their

important contribution to the policy dialogue.

A New Approach to Managing Illegal Psychoactive Substances in Canada. (2014). Canadian Public Health Association

Annual Update. (2015). Colorado Department of Revenue Enforcement Division

Cannabis Policy Framework. (2014). Centre for Addiction and Mental Health

Cannabis Regulation: Lessons Learned in Colorado and Washington State. (2015). Canadian Centre on Substance Abuse

Considering Marijuana Legalization: Insights for Vermont and Other Jurisdictions. (2015). Rand Corporation

Joint Venture: A Blueprint for Federal and Provincial Marijuana Policy. (2016). C.D. Howe Institute

Lessons After Two Years of Marijuana Legalization: Short Report. (2015). Smart Approaches to Marijuana

Marijuana for Medical Purposes: Policy Brief. (2014). Canadian Centre on Substance Abuse

Marijuana for Non-Therapeutic Purposes: Policy Considerations. (2014). Canadian Centre on Substance Abuse

Monitoring Health Concerns Related to Marijuana in Colorado: 2014 (2015). Colorado Department of Public Health and

Environment

Pathways Report: Policy Options for Regulating Marijuana in California. (2015). Blue Ribbon Commission on Marijuana Policy

Uruguay’s Drug Policy: Major Innovations, Major Challenges. (2015). Brookings Institution, Washington Office on Latin America3

3 This paper is part of a series, Improving Global Drug Policy: Comparative Perspectives and UNGASS 2016, available from www.brookings.edu.

http://www.cpha.ca/uploads/policy/ips_2014-05-15_e.pdf

https://www.colorado.gov/pacific/sites/default/files/2014%20MED%20Annual%20Report_1.pdf

http://www.camh.ca/en/hospital/about_camh/influencing_public_policy/Documents/CAMHCannabisPolicyFramework.pdf

http://www.ccsa.ca/Resource%20Library/CCSA-Cannabis-Regulation-Lessons-Learned-Report-2015-en.pdf

http://www.rand.org/pubs/research_reports/RR864.html

https://www.cdhowe.org/public-policy-research/joint-venture-blueprint-federal-and-provincial-marijuana-policy

https://learnaboutsam.org/wp-content/uploads/2015/03/FINAL-REPORT-1.pdf

http://www.ccsa.ca/Resource%20Library/CCSA-Non-Therapeutic-Marijuana-Policy-Brief-2014-en.pdf

http://www.ccsa.ca/Resource%20Library/CCSA-Non-Therapeutic-Marijuana-Policy-Considerations-2014-en.pdf

https://www.colorado.gov/pacific/cdphe/monitoring-marijuana-related-health-effects

https://www.safeandsmartpolicy.org/wp-content/uploads/2015/07/BRCPathwaysReport.pdf

http://www.wola.org/publications/uruguay_s_drug_policy_major_innovations_major_challenges

http://www.brookings.edu/